The Alliance of Pensioners’ Organisations welcomes the clarification of The Times’ policy on pensions’ sustainability and adequacy. The paper appears to feel that the Alliance reacted too quickly, too heavily to the two editorials on the “subject”. But are we really all that blameworthy?

We have heard it loud and clear that the World Bank considers a pension of 40 per cent of average wage to be adequate. In the case of Malta this would mean a pension of around 95 per cent of what Europe accepts as a reasonable minimum pension, i.e. one of not less than 60 per cent of the national medium income. This far from generous pension is better that the pittance the Chicago School economists of the World Bank keep advocating.

Of course we know that adequacy and sustainability are two sides of the same coin; what we do not accept is that sustainability is only achievable through chipping away at adequacy. As The Times correctly points out, the Alliance did make suggestions on how sustainability can be attained and maintained.

One final point: Long-term forecasts are just that and not gospel truth.

Economists, with the caveat of other things being equal, assume that humans will always act in a rational manner. They need reminding that Adam Smith, before writing about the “invisible hand”, also wrote that emotions, feelings and morality are aspects of human behaviour which the economist should not ignore but should treat as topics worthy of investigation (The Theory Of Moral Sentiments, 1759). The world economy is today in a mess precisely because humans were considered as robots. Heaven forbid that contributory work-related social security benefits are treated in the same manner.